09:23     KC-YZ CM@EC0602<03876> - Announcement (1)                           

    The Stock Exchange of Hong Kong Limited (the `Stock Exchange') takes      
    no responsibility for the contents of this announcement, makes no         
    representation as to its accuracy or completeness and expressly           
    disclaims any liability whatsoever for any loss howsoever arising         
    from or in reliance upon the whole or any part of the contents of         
    this announcement.                                                        
                                                                              
    KBC Financial Products International Ltd.                                 
                                                                              
    Derivative Warrants                                                       
    Matters arising from the bonus issue of                                   
    Yanzhou Coal Mining Company Limited (`Yanzhou')                           
                                                                              
    Announcement                                                              
                                                                              
                                                                              
    This announcement sets out details of adjustments to derivative           
    warrants on Yanzhou issued by KBC Financial Products International        
    Ltd. following the bonus issue of Yanzhou. These adjustments are          
    effective on and from 26th May 2005. The purpose of these adjustments     
    is to ensure that as far as possible the value of the warrants            
    remains unchanged immediately before and immediately after the bonus      
    issue.                                                                    
                                                                              
                                                                              
    Introduction                                                              
    On 26th April 2005, Yanzhou announced proposals for a bonus issue of      
    shares in the proportion of six new bonus shares (`Bonus Issue') for      
    every ten existing shares of RMB1.00 each of Yanzhou (`Share') held       
    by a shareholder. Consequently, it is necessary to make certain           
    adjustments to all unexpired single stock derivative warrants on          
    Yanzhou issued by KBC Financial Products International Ltd. (the          
    `Issuer') in accordance with the terms and conditions of such             
    warrants. These adjustments will take effect from 26th May 2005 and       
    the purpose of these adjustments is to ensure that as far as possible     
    the value of the warrants remains unchanged immediately before and        
    immediately after the Bonus Issue.                                        
                                                                              
    Warrants Affected                                                         
    Warrants with entitlement ratio of 1 share in respect of every ten        
    warrants                                                                  
                                                                              
    Each of the existing single stock warrants (as set out in the table       
    below) has an entitlement ratio of one Yanzhou share in respect of        
    every ten warrants. If the Bonus Issue is approved by Yanzhou's           
    shareholders, with effect from and including 26th May 2005 the            
    entitlement ratio will change from one Yanzhou share to 1.6 Yanzhou       
    shares in respect of every ten warrants. Details of the warrants          
    affected (the `Warrants') are set out in the table below.                 
                                                                              
    Stock Short Name     Stock Code           Board Lot                       
                                                                              
    KC-YZ CM@EC0602      03876                20,000 warrants                 
                                                                              
                                                                              
                                                                              
    The Adjustments                                                           
    The current terms and conditions of the Warrants provide that the         
    Cash Settlement Amount for every ten warrants on expiry is calculated     
    in accordance with the following formula:                                 
                                                                              
    Entitlement x (Closing Price - Exercise Price) - Exercise Expenses        
                                                                              
    where (i) the Entitlement is one Share; (ii) the Closing Price is         
    the arithmetic mean of the closing prices of one Yanzhou share (as        
    derived from the Daily Quotation Sheet of the Stock Exchange, subject     
    to any adjustments (as determined by the Issuer in accordance with        
    the Conditions) to such closing prices as may be necessary to reflect     
    any capitalisation, rights issue, distribution or the like) for each      
    of the five Business Days immediately preceding the expiry date;          
    (iii) the Exercise Price is the current exercise price for such           
    warrant; and (iv) the Exercise Expenses (as defined in the terms and      
    conditions of the Warrants).                                              
                                                                              
    With effect from and including 26th May 2005, the Cash Settlement         
    Amount for every ten warrants on expiry will be calculated in             
    accordance with the following formula:                                    
                                                                              
    New Entitlement x (Closing Price - New Exercise Price) - Exercise         
    Expenses                                                                  
                                                                              
                                                                              
    where (i) the New Entitlement is 1.6 Shares; (ii) the Closing Price       
    is the arithmetic mean of the closing prices of one Yanzhou share         
    (derived as described above and subject to adjustment as described        
    above) for each of the five Business Days immediately preceding the       
    expiry date; (iii) the New Exercise Price is the current exercise         
    price for such warrant divided by 1.6; and (iv) the Exercise Expenses     
    (as defined in the terms and conditions of the Warrants).                 
                                                                              
    For the avoidance of doubt, exercise expenses will be deducted            
    before any payment is made by the Issuer to the relevant                  
    warrantholder in accordance with the terms and conditions of the          
    relevant warrants. Therefore, after the above adjustments, the New